The first quarter of 2023 was especially tough for venture funding, which struggled to maintain momentum due to market uncertainties and changing investor sentiments.
Despite this, cybersecurity startups managed to maintain relative funding levels, with a total of nearly $2.7 billion in investment in Q1 2023, according to data from Crunchbase. Although this amount is slightly higher than the previous quarter, it falls well short of the previous year's first quarter, where cybersecurity startups received $6.5 billion in investment. The drop in deal flow was even more concerning, with only 149 deals announced in the first quarter, marking a 45% year-to-year decrease and the lowest total in years.
While this should have hurt the dollar volume, some of those extremely large rounds in the quarter including; SandboxAQ’s $500 million round; Netskope's $401 million convertible note from Morgan Stanley; Wiz raised $300 million capital led from Lightspeed, helped keep the dollar value high even as the deal flow continued to drop.
In this Techloy chart, we take a look at the year-on-year quarterly funding for cybersecurity startups globally, according to data from Crunchbase.